How can business, finance and government work in harmony in Indonesia for a just transition of the country’s energy system?
That was the topic of the ASEAN Energy Business Forum side event ‘Investing in Energy Transition in Indonesia: Bridging the Gap Between Policy and Practice’held in Bali last month.
The event provided an opportunity for representatives of renewable energy businesses to share their experiences with policymakers, and vice-versa.
It was the third ASEAN side event organised by Climateworks Centre and the Centre for Policy Development (CPD) in collaboration with the Institute for Essential Services Reform (IESR), Indonesia Research Institute for Decarbonization (IRID), Purnomo Yusgiantoro Center (PYC) and International Institute for Sustainable Development (IISD).
With two hours of keynote speeches and panels, the event featured wide-ranging and far-reaching discussions – below is just a small taste of what was said by some of the speakers.
Forum for discussion and collaboration
In her opening remarks for the event, Climateworks CEO Anna Skarbek urged those present to ‘harness the power of collaboration’.
‘We have the privilege here of some of the finest minds and experts in the field of energy transition in this region,’ she said.
CPD CEO Andrew Hudson said these discussions were important because clear and consistently implemented policy is needed to ensure business can take up opportunities provided by the energy transition.
‘We need to create greater certainty about how businesses can invest in green opportunities in Indonesia and the region,’ he said.
Keynote speakers highlight importance of investment
The first keynote speaker was Imam Soejoedi, Expert Staff for Macro Economics at Indonesia’s Ministry of Investment, who provided context on the Indonesian investment environment – including the steadily increasing international investment in the country.
‘In the uncertainty of the global economic crisis, we are still optimistic that investors still trust Indonesia,’ he said. ‘Investment is not only the very short-term business – investment is about the long-term business, so trust is very important.’
Among other things, he noted how the Government of Indonesia’s ban on the export of some unrefined ores would boost the country’s growing battery manufacturing industry, as most of the components needed for EV batteries areall found in Indonesia.
Dr Suminto Sastrosuwito, Director General of Budget Financing and Risk Management at Indonesia’s Ministry of Finance, began the second keynote address by outlining the need for billions of dollars in additional investment if ASEAN nations are to deliver on its climate commitments.
Mobilising the private sector iscritical in financing the energy transition, he said, which can be enabled ‘through the development of innovative financing mechanisms, including public–private partnership, blended finance, green bonds and [a] dedicated renewable energy financing platform’.
Dr Suminto detailed many positive examples of such developments in Indonesia, including the Just Energy Transition Partnership, carbon pricing and the Indonesia Energy Transition Mechanism Country Platform, which he described as ‘inspirational and transformative’.
Panel discussions provide platform for business, government
Two panels followed, the first of which featured a discussion among business representatives, moderated by Climateworks’ Head of Engagement and Partnerships Luke Brown.
- Paulus Tjakrawan, Chairman, Indonesia Biofuel Producers Association
- Annisa Chairani, Marketing and Business Development Manager, PT TML Energy
- Andre E. Susanto, Chief Technology Officer, Quantum Power Asia
- Tim Anderson, President Director, Sun Cable.
Some of the themes emerging in the discussion included the scale and ambition of current and planned projects, and the need for regulatory certainty and coordination in order for such projects to succeed. The audience heard that investors and national policy actors need to consider local politics and policies as they often influence project risks and delivery.
The second panel, moderated by IRID Executive Director Moekti H Soejachmoen, featured representatives from Indonesian government and government-owned organisations:
- Rachmat Kaimuddin, Deputy Coordinating Minister for Maritime and Investment
- Gigih Udi Atmo, Director of Energy Conservation, Ministry of Energy and Mineral Resources of Indonesia
- Ida Bagus Setiawan, Head of Bali Labour, Energy, and Mineral Resources Agency in Bali Province
- Darmawan Prasodjo, President Director of PT PLN (Persero).
Themes included the challenges presented by Indonesia’s geography and demography, and the importance of maintaining the stability and affordability of Indonesia’s electricity supply while decarbonising.
Optimism ‘the energy we need’
In closing, IESR Executive Director Fabby Tumiwa, congratulated panellists on their optimism, saying, ‘for the energy transition, that’s the energy we need – we need optimism’.
He addressed the tension between the needs of government and business.
‘Business wants everything clear, transparent, fast,’ he said. ‘But public policy has to deal with a number of complexities.’
He said policies that have been successful in other countries may not be successful in Indonesia, saying ‘if we want success … we have to have Indonesia style policy’.